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Analysing Macro‐Poverty Linkages of External Liberalisation: Gaps, Achievements and Alternatives
Author(s) -
Gunter Bernhard G.,
Taylor Lance,
Yeldan Erinç
Publication year - 2005
Publication title -
development policy review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.671
H-Index - 61
eISSN - 1467-7679
pISSN - 0950-6764
DOI - 10.1111/j.1467-7679.2005.00287.x
Subject(s) - computable general equilibrium , economics , liberalization , credibility , poverty , investment (military) , economic rent , macroeconomics , macro , ex ante , international economics , microeconomics , economic growth , market economy , political science , programming language , politics , computer science , law
CGE modelling has dominated analysis of the impact of external liberalisation on poverty. This article provides a structuralist critique of standard neo‐classical CGE models. It highlights five sets of gaps and partial achievements in the modelling of issues affecting the poverty impact of macroeconomic policies: duality and structural rigidities; efficiency gains and quota rents; the investment and savings specification; the nature of public expenditures; and the modelling of financial fragility, risk premia and issues of credibility. It outlines a model that makes it possible to analyse more plausible stories about the impact of both current and capital account liberalisation and questions the realism of existing approaches to ex‐ante poverty impact assessment.